New 100% government backed small business loan scheme
- borrow between £2,000 and £50,000 and access the cash within days
- interest free for the first 12 months – online short simple form
Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders, the Chancellor announced today (Monday 27 April).
The new Bounce Back Loans scheme provides loans up to £50,000to bolster the support available to small businesses affected by the coronavirus pandemic. It is designed to ensure that small firms can get finance in a matter of days.
The government will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.
The Chancellor of the Exchequer, Rishi Sunak, said:
Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.
This is in addition to business grants, tax deferrals, and the job retention scheme, which are already helping to support hundreds of thousands of small businesses.
Business Secretary Alok Sharma said:
Our small businesses are vital in ensuring our communities thrive and will be crucial in creating jobs and securing economic growth as we recover.
This rapid loan scheme offers additional protection so small companies across the country can get access to the finance they need immediately, as part of the unprecedented package of support we have put in place.
The scheme will launch for applications on Monday 4 May. Firms will be able to access these loans through a network of accredited lenders.
Reactions from business
Mike Cherry, Federation of Small Businesses National Chairman:
This crucial new initiative should enable thousands of small businesses to access the working capital they need quickly, helping to protect the millions of jobs they provide in every part of the UK.
This step forward marks another decisive intervention from the Treasury and the Business Department, building on existing support in an innovative way. Swift delivery is now key, and we also look forward to working with government in the long-term to enhance market competition, including that provided by non-bank lenders.
We are pleased to see the Chancellor and the Business Secretary listening to the needs of small businesses, and we will continue to work with them to make sure small firms and the jobs they provide are protected throughout this public health challenge and that small firms are at the forefront of leading the recovery.